Correlation Between Seoul Electronics and Sinil Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics and Sinil Pharmaceutical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Seoul Electronics and Sinil Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Electronics Telecom and Sinil Pharmaceutical Co, you can compare the effects of market volatilities on Seoul Electronics and Sinil Pharmaceutical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Seoul Electronics with a short position of Sinil Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Sinil Pharmaceutical.
Diversification Opportunities for Seoul Electronics and Sinil Pharmaceutical
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seoul and Sinil is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and Sinil Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinil Pharmaceutical and Seoul Electronics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Seoul Electronics Telecom are associated (or correlated) with Sinil Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinil Pharmaceutical has no effect on the direction of Seoul Electronics i.e., Seoul Electronics and Sinil Pharmaceutical go up and down completely randomly.
Pair Corralation between Seoul Electronics and Sinil Pharmaceutical
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the Sinil Pharmaceutical. In addition to that, Seoul Electronics is 1.84 times more volatile than Sinil Pharmaceutical Co. It trades about -0.06 of its total potential returns per unit of risk. Sinil Pharmaceutical Co is currently generating about -0.01 per unit of volatility. If you would invest 716,000 in Sinil Pharmaceutical Co on November 8, 2024 and sell it today you would lose (65,000) from holding Sinil Pharmaceutical Co or give up 9.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. Sinil Pharmaceutical Co
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Sinil Pharmaceutical |
Seoul Electronics and Sinil Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Sinil Pharmaceutical
The main advantage of trading using opposite Seoul Electronics and Sinil Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics position performs unexpectedly, Sinil Pharmaceutical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sinil Pharmaceutical will offset losses from the drop in Sinil Pharmaceutical's long position.| Seoul Electronics vs. Taegu Broadcasting | Seoul Electronics vs. Lotte Non Life Insurance | Seoul Electronics vs. Daesung Industrial Co | Seoul Electronics vs. Sejong Industrial |
| Sinil Pharmaceutical vs. Kolon Life Science | Sinil Pharmaceutical vs. JETEMA Co | Sinil Pharmaceutical vs. Aminologics CoLtd | Sinil Pharmaceutical vs. Daihan Pharmaceutical CoLtd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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